Tuna Dolphin GATT Case (TUNA Case)

CASE NUMBER: 72
CASE MNEMONIC: TUNA
CASE NAME: Tuna Dolphin Case
I. IDENTIFICATION
1. The Issue
The United States banned imports of Mexican tuna because
Mexico had not taken steps to reduce the number of Eastern
Pacific Tropical dolphins killed each year due to tuna fishing.
Mexico appealed the case to the General Agreement on Tariffs
and Trade (GATT), where the panel ruled in favor of Mexico.
The ruling was in part due to the discriminatory manner in
which the United States implemented the measure and in part due
to the GATT resistance to cases where the process of production
is a major factor. Furthermore, the panel found that the U.S.
labelling of "Dolphin Free" tuna did not conform to GATT
standards. The case was, however, solved bilaterally between
the United States and Mexico.
2. Description
There has been a long history of dolphins being killed in
the Eastern Tropical Pacific (ETP). It became significant in
the 1950s when tuna fishermen began to exploit the unique
relationship that existed between the tuna and the dolphin.
In this zone, the tuna schools swam below the surface swimming
dolphin. The fishermen took advantage of this by developing
the purse-seine net fishing method. They also used the
dolphins to track, chase, and encircle the tuna. Fishermen
sealed off any escape routes, catching both the dolphins and
the tuna in their nets and many dolphins were killed or injured
in this process. While some suffocated due to flipper rostrum
(beak), and fluke entanglement, others were crushed by the
weight of the tuna or by passing through the power blocks
during net retrieval.
The kill rate was initially low because fishermen could
only encircle a small percentage of the dolphin school.
However, with the development of the Puretic hydraulic power
blocks and lighter stronger nets, fishermen began to use larger
nets. These nets were up to 3/4 of a mile long and over 300
feet deep. This allowed the fishermen to increase their
efficiency by encircling a larger percentage of both the tuna
and the dolphin herd. With this expansion, fishing in the ETP
changed dramatically. The previously used bait boats switched
to the purse-seine method, increasing the number of dolphin
sets (to focus on the dolphin to find the tuna) and the amount
of tuna caught. In 1959, it was estimated that 590 sets were
made on dolphins. The following year, this number rose to
5,400 sets and was the highest yellowfin tuna catch per
standard day.
There were a number of other mechanical changes that also
increased the efficiency of the purse-seine fishing technique.
First, speed boats were introduced, decreasing the time of the
chase. Then, helicopters and fixed wing planes were used to
reduce the time used to spot dolphin. These innovations
increased the fleets capacity nearly five times in fifteen
years. In 1965, the fleet caught 48,673 tons of tuna which
increased to 189,426 tons by 1980.
With the increased efficiency, the mortality rates of
dolphins escalated. U.S. tuna fishermen realized that their
fishing technique could not be used unless the large numbers of
dolphin were alive and began to develop methods to reduce the
dolphin kills and the injury rates. First, they used the
backdown method in which the vessel would reverse when one-half
to two-thirds of the net was retrieved. This allowed the net
to sink and the dolphins to escape. Eventually, fisherman also
incorporated manned rafts into this procedure to assist them in
their escape. Second, finer mesh nets were developed to reduce
the chance for flipper and rostrum entanglement. Even with
fisherman using these techniques the dolphin kill rate remained
high. It was estimated that 300,000 dolphin were killed per
year.
The public became concerned with these rates, and Congress
responded by passing the Marine Mammal Protection Act in 1972
(see HAWKSBIL, SHRIMP, and TURTLE cases). This act was
intended to reduce the dolphin kills "to levels approaching
zero" by legally requiring U.S. tuna fishermen to incorporate
these techniques. Furthermore, the act established a permit
system, setting a fixed ceiling for dolphin kills and limiting
the taking rate for species that were endangered. To ensure
that these regulations were abided by, the MMPA also required
U.S. vessels to carry federal observers (see Table 72-1).
Table III-72-1
Origin of Vessels in the ETP
Country Number
United States 34
Mexico 43
Venezuela 15
Vanatu 4
Spain 2
Cayman Is. 1
Costa Rica 1
El Salvador 1
Panama 1
The MMPA greatly reduced the number of dolphins killed by
U.S. vessels. However, the composition of ships also changed,
and the total number of dolphin kills did not decline. In the
1960s, U.S. vessels comprised 99 percent of the ETP fleet, but
by 1986, only 34 of the 103 purse-seiner ships using dolphin
sets were registered in the United States. The remaining 69
consisted of foreign vessels: with 43 from Mexico, 15 from
Venezuela, 4 from Vanatu, 2 from Spain and one from the Cayman
Islands, Costa Rica, El Salvador, and Panama. The Commerce
Department estimated the kill rates for these ships were two to
four times higher (100,000 per year) than U.S. kill rates.
Congress became concerned with these high foreign kill
rates, and in 1984 it inserted the "comparability provision" or
the Direct Embargo Provision ($101 (a) (2)) into the Marine
Mammal Protection Act. The goal of this provision was to
decrease foreign kills by prohibiting the importation of
yellowfin tuna from nations that did not have regulatory
programs and mortality rates comparable to the United States.
The Secretary...in the case of yellowfin tuna
harvested with purse seines in the eastern tropical
Pacific Ocean...to be exported to the United States,
shall require that the government of the exporting
nation provide documentary evidence 1) that the
government of the harvesting nations has adopted a
regulatory program governing the incidental taking of
marine mammals in the course of such harvesting that
is comparable to that of the United States: and 2)
that the average rate of that incidental taking by
the vessels is comparable to the average rate of
incidental taking of marine mammals by the United
States vessels in the course of such
harvesting.
Congress appointed the Secretary of Commerce to ensure
that the kill rates of the importing countries did not exceed 2
times the taking rate of the U.S. fleet in 1989 and 1.25 times
the U.S. rate in 1990. If countries did not meet these
standards the Secretary was required to implement a direct tuna
embargo. To further ensure compliance with the MMPA's Direct
Embargo Provision, Congress included the Intermediary Nation
Provision, the Pelly Amendment, and the Dolphin Protection
Consumer Information Act (DPCIA). The Intermediary Nation
Provision (101(a)(2)(c)) stated that intermediary countries
that exported tuna to the U.S. caught by other nations must
prove to the Secretary that they have prohibited tuna and tuna
products from harvesting countries that have been directly
banned by the United States. If the intermediary country did
not ban these products within sixty days of the import embargo
and if the Secretary did not receive proof of this in 90 days,
then the Secretary was required to implement an embargo against
this country on the 91st day.
The Pelly Amendment, under MMPA 101(a)(2)(D), stated that
after either ban had been implemented for six months, the
Secretary was required to notify the President of the United
States.This triggered the President's discretionary power to
impose a ban on all fish products for a period determined by
the President and sanctioned by GATT.
The third act, the Dolphin Protection Consumer Information
Act (DPCIA), stated that producers, importers, exporters,
distributors, or sellers of tuna products could only include a
dolphin safe label if the tuna were harvested in a manner that
was not harmful to dolphin. Therefore, tuna caught by purse
seine vessels in the ETP or tuna taken on the high seas by
drift net fishing could not be labeled as dolphin safe.
Despite Congress' attempt to ensure that foreign tuna
importers complied with the provisions of the MMPA, by 1990 the
Secretary of Commerce still had not issued comparable findings
or implemented the bans. The State Department and the Commerce
Department opposed these embargoes in the interests of good
foreign relations. Consequently, Earth Institute filed suit in
the Federal District Court in San Francisco against Commerce to
ensure that the direct and indirect tuna import bans were
enforced. The court ruled in favor of the Institute and
directed the government to execute these provisions. The U.S.
government appealed this decision, but the Ninth Circuit Court
of Appeals unanimously upheld the district courts ruling and on
February 22, 1991, it ordered the U.S. to enact the embargo
against Mexico and any other country that violated the MMPA.
During the period of 1990/1991, the U.S. implemented tuna
embargoes on Mexico, Venezuela, Ecuador, Panama, and Vanatu.
Since then, Ecuador and Panama have complied with U.S.
standards, and the embargoes were lifted. However, Mexico
resisted the dolphin safe-measures and continued to kill an
estimated 50,000 dolphin every year.
3. Related Cases
TUNA2 case
SHRIMP case
SALMON case
TURBOT case
SQUID case
SEACUKE case
Keyword Clusters
(1): Trade Product = TUNA
(2): Bio-geography = OCEAN
(3): Environmental Problem = Species Loss Sea [SPLS]
4. Draft Author: Nina Joshi
II. LEGAL Clusters
5. Discourse and Status: DISagreement and COMPlete
On January 25, 1991, Mexico requested that a GATT
resolution panel determine the legality of the U.S. Direct and
Intermediary Tuna Import Embargoes, the Pelly Amendment, and
the Dolphin Protection Consumer Information Act. To address
this allegation, the panel examined Article III:1 and 4
preventing discrimination of foreign goods; Article II:1
allowing for internal regulation; and Article XI:1 prohibiting
quantitative restrictions. Under the GATT statutes both the
direct and indirect tuna embargoes were considered quantitative
restrictions. However, the United States insisted that these
bans were internal regulations allowed under Article II:1.
This article:
applies to an imported product and the like domestic
product and is collected or enforced in the case if
the imported product at the time of importation, is
nevertheless to be regarded as an internal tax of
other internal charge, or a law, regulation or
requirement of the kind [permissible under Article
III].
In other words, nations could tax or regulate the
importation of products if it was not inconsistent with Article
III. The panel found that in order for Article III:1 and 4 or
II:1 to be applicable, the embargo would have to apply to the
composition of the product. The MMPA did not apply to tuna
because it did not change the composition of tuna or regulate
the sale of tuna. It merely dictated the manner in which the
product was harvested. Therefore the embargoes were not
internal regulations.
The panel continued by stating that even if the MMPA bans
applied to the product, they still violated Article III:4. This
article stated that "the products of one country imported to
another country must be accorded treatment no less favorable
than that accorded to like [domestic products]." The MMPA
did not do this. The Secretary did not base his/her
determination on the current U.S. rates. Instead, they could
not exceed 2 times the kill rate of the U.S. fleet in 1989 and
1.25 of the U.S. rate in 1990. Since the direct embargo was
not consistent with Articles III:1, III:4, or II:1, the panel
examined Article XI:1 which stated:
No prohibitions or restrictions other than duties,
taxes or other charges, whether made effective
through quotas, imports or exports licenses of other
measures, shall be instituted or maintained by any
contractual party on the importation of any product
of the territory of any other contracting party or on
the exportation or sale for export of any product
destined for the territory of any other contracting
party.
They panel found that since the direct and indirect bans
were placed on tuna that originated in Mexico and was harvested
by Mexican vessels, the embargoes were quantitative
restrictions, prohibited by GATT. However, Article XX(b)(c)
provided an exception to Article XI:1:
Subject to the requirement that such measures are not
applied in the manner which would constitute a means
of arbitrary or unjustifiable
discrimination...nothing in this agreement shall be
construed to prevent the adoption of enforcement by
any contracting party of measures:...b) necessary to
protect human, animal, plant life or health....g)
relating to the conservation of exhaustible natural
resources of such measures are made effective in
conjunction with restrictions on domestic production
or consumption.
To use these exceptions, the panel decided that the direct
and indirect bans must be considered "necessary" and must apply
to products within U.S. jurisdiction. First, they found that
the MMPA embargoes were not "necessary". The United States had
not made sufficient efforts to exhaust alternative remedies
(e.g. an international agreement on tuna/dolphins) before they
established the embargoes. In addition, they found that the
MMPA import standards were too "unpredictable" to be
"necessary" because the U.S. government did not implement the
embargoes when they were enacted by Congress. Second, the tuna
originated from Mexico and therefore was not under the
jurisdiction of the United States. In its final determination
the panel agreed that the United States did not meet the
requirements for exceptions, and therefore, the direct and
indirect bans on tuna were quantitative restrictions that
violated the GATT provisions.
The panel did, however, uphold the United States' Pelly
Amendment and the Dolphin Protection Consumer Information Act
(DPCIA). In regard to the Pelly Amendment, the panel stated
that the amendment did not require the President to implement
an embargo, but it merely gave the President this discretionary
power. Furthermore the President had not invoked this power,
and its existence did not violate GATT.
The panel also found that the DPCIA was not a quantitative
restriction. It did not restrict the sale of tuna and tuna
products or provide any advantage for dolphin safe products, it
merely gave the consumer the freedom of choice. The provision
did not violate GATT because it did not discriminate against
the origin of vessels that fished in the ETP but rather against
the technique of obtaining this tuna.
The panel's decision may also threaten the validity of
previous implemented environmental policies. For example: the
other sections of the MMPA that protect marine life, including
the ban on the importation of baby seals and whale products
(see NWHALE and JWHALE cases); the Magnuson Fisheries
Conservation and Management Act which protects anadromous
species and resources on the U.S. continental shelf; the
African Elephant Conservation Act banning the importation of
ivory (see ELEPHANT case); the Lacey Act; the Federal
Insecticide Fungicide and Rodenticide Act, and the Forest
Relief Conservation and Shortage Act (see TIMOWL and OPTION9
cases).
The case may also affect a number of international
agreements which ban free trade to protect the environment.
These include the Montreal Protocol on the Ozone Layer (see
MONTREAL case), the Basel Convention (see BASEL case), the
United Nations' Driftnet Resolution, the International
Convention for the Regulation of Whaling, the International
Agreement for the Conservation of Fisheries, the Endangered
Species Act, and the Convention of International Trade in
Endangered Species.
6. Forum and Scope: GATT and MULTIlateral
Mexico and the United States chose to defer GATT action
and solve the dispute bilaterally. However, it is possible
that the judgement will still be approved. First, Mexico could
become dissatisfied with the U.S./Mexico free trade agreement
and could revoke the ruling at any time. Second, the United
States may choose to voluntarily comply. Third, the EC and a
number of other nations could pressure the panel into adopting
the ruling. In fact, the EC has already threatened to file a
formal complaint and at second case is underway. If the
decision is adopted by the panel and the United States refuses
to eliminate the embargo, the United States may face sanctions
and reciprocal trade retaliation and may be forced to pay
Mexico for monetary damages.
7. Impact and Scope: 116 (GATT members)
There were two parties directly affected (United States
and Mexico) and nine indirectly (Venezuela, Vanatu, Spain,
Cayman Islands, Costa Rica, El Salvador, Panama). In the end,
all GATT members could be affected.
8. Legal Standing: TREATY
III. GEOGRAPHIC Clusters
9. Geographic Locations
a. Geographic Domain : PACIFIC
b. Geographic Site : Eastern Pacific [EPAC]
c. Geographic Impact : USA
10. Sub-National Factors: NO
11. Type of Habitat: OCEAN
IV. TRADE Clusters
12. Type of Measure: Import Ban [IMBAN]
13. Direct vs. Indirect Impacts: DIRect
14. Relation of Measure to Environmental Impact
a. Directly Related : Yes DOLPHIN
b. Indirectly Related : Yes TUNA
c. Not Related : Yes SHRIMP
d. Process Related : Yes Species Loss Sea [SPLS]
The Pelly Amendment bans the importation of dolphin, tuna
that is harmful to dolphin, and threatens sanctions on shrimp
imports as retaliation for excessive dolphin kill rates.
15. Trade Product Identification: TUNA
16. Economic Data
Mexico and the EC maintain that they have lost a large
percentage of trade due to the tuna bans. While Mexico claims
that it has lost hundreds of millions of dollars in exports,
the EC asserts that its tuna exports to the United States have
decreased its revenue by 4 million European Currency Units.
17. Degree of Trade Protection: BAN
European export loss due to the decision is said to equal
four million ECUs.
18. Industry Sector: FOOD
19. Exporter and Importer: MEXICO and USA
V. ENVIRONMENT Clusters
20. Environmental Problem Type: Species Loss Sea [SPLS]
This case represents the limited domain of the environment
in trade policy and where environmental rules are desperately
needed. First, the jurisdiction ruling does not address the
transnational nature of environmental problems or ensure the
protection of the global commons. Second, the limitation only
allows nations to implement quantitative restrictions if a
country proves that the standard is essential to the protection
of human, animal, or plant life.
21. Name, Type and Diversity of Species
Name: Eastern Tropical Pacific Dolphin
Type: Animal/Vertibrate/Mammals/Cetecea
Diversity: Sustainable yield of
2,600,000 metric tons
per year (eastern
Central Pacific)
22. Resource Impact and Effect : HIGH and PRODuct
Mexico did not change its fishing practices when the
embargo was implemented. Therefore, whether the panel's
decision is adopted or not, Mexico will continue to kill
approximately 50,000 dolphins per year.
23. Urgency and Lifetime: MEDium and 20-30 years
24. Substitutes: LIKE
Tuna are already over fished in many of the world's
oceans. Some demand could switch to like products.
VI. OTHER Factors
25. Culture: NO
26. Trans-Boundary: NO
27. Rights: NO
28. Relevant Literature
Dunne, Nancy. "Environmental Rules Set Stage for GATT
Conflicts." World Trade News (December 5,
1991).
Earth Island Institute Publication. Dolphin Alert.
California: (Winter 1991/1992): 1-6.
Crosson, David. "Dolphin Killings Ruffle Trade Pact."
San Francisco Examiner (September 2, 1991).
"European Boycott Urged on Mexican Tuna." LDC Debt
Report/Latin American Markets 4/21 (June 10,
1991): 8-9.
Farnsworth, Clyde H. "Environment Verses Freer Trade." New
York Times (February 11, 1991): D4.
"GATT Council Refuses EC Request to Adopt Panel Report On U.S.
Tuna Embargo." International Tribune Reporter 9/9
(February 26, 1992): 353-355.
Housman, Robert F. and Zaelke, Durwood. "The Collision of the
Environment and Trade: The GATT Tuna\Dolphin
Decision." Mimeograph.
International Trade Commission. Tuna: Current Issues Affecting
the U.S. Industry. Washington, DC: USITC, 1992.
MacLeod, Alexander. "GATT Report Draws Fire Environmentalists
in Runup to Key Summits." The Christian Science
Monitor (February 18, 1992): 4-6.
Mathews, Jessica. "Dolphins, Tuna and Free Trade." The
Washington Post: A1.
"Mexico Agrees to Defer Action on Complaint on U.S. Tuna
Embargo." International Trade Daily (BNA, September
20, 1991).
Phillips, David. "Statement on the Implications of the
GATT Panel Ruling on Dolphin Protection and the
Environment." Before the Subcommittee on Health and
the Environment of the House Energy and Commerce
Committee, September 27, 1991.
Scheele, Lesley and Dean Wilkinson. "Background Paper on the
Eastern Tropical Pacific Tuna/Dolphin Issue."
Greenpeace (April 1988): 1-56.